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Imported item 490

Imported item 490

5 min read

July 22, 2010

People whose money disappeared because a financial services company collapsed were paid a total of £204 million in compensation over the past year, the Financial Services Compensation Scheme has said.

The scheme paid the cash to 21,802 claimants, out of a total of 31,592 claimants, for the 12 months up to the end of March 2010.

Two-thirds of the bill was taken up by people who had either lost cash because an investment firm had gone bust or because they had been "mis-sold" payment protection insurance.

The number of protection insurance claims the scheme received went up sharply to 2,400 during the year. Officials said these numbers will continue to increase throughout the current financial year.

Payment protection insurance is supposed to cover the repayment of debt if the person is unable to work because of illness, an accident or if they lose their job, but has been heavily criticised in recent times over claims it has been sold to people who would never be able to claim on it.